Correlation Between Barings Global and Jpmorgan Emerging
Can any of the company-specific risk be diversified away by investing in both Barings Global and Jpmorgan Emerging at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Barings Global and Jpmorgan Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Floating and Jpmorgan Emerging Markets, you can compare the effects of market volatilities on Barings Global and Jpmorgan Emerging and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Barings Global with a short position of Jpmorgan Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Jpmorgan Emerging.
Diversification Opportunities for Barings Global and Jpmorgan Emerging
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barings and Jpmorgan is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Jpmorgan Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Emerging Markets and Barings Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Barings Global Floating are associated (or correlated) with Jpmorgan Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Emerging Markets has no effect on the direction of Barings Global i.e., Barings Global and Jpmorgan Emerging go up and down completely randomly.
Pair Corralation between Barings Global and Jpmorgan Emerging
Assuming the 90 days horizon Barings Global is expected to generate 2.1 times less return on investment than Jpmorgan Emerging. But when comparing it to its historical volatility, Barings Global Floating is 4.17 times less risky than Jpmorgan Emerging. It trades about 0.37 of its potential returns per unit of risk. Jpmorgan Emerging Markets is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,672 in Jpmorgan Emerging Markets on September 14, 2024 and sell it today you would earn a total of 36.00 from holding Jpmorgan Emerging Markets or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Jpmorgan Emerging Markets
Performance |
| Timeline |
| Barings Global Floating |
| Jpmorgan Emerging Markets |
Barings Global and Jpmorgan Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Jpmorgan Emerging
The main advantage of trading using opposite Barings Global and Jpmorgan Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Jpmorgan Emerging can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jpmorgan Emerging will offset losses from the drop in Jpmorgan Emerging's long position.| Barings Global vs. Boston Partners Longshort | Barings Global vs. Barings Active Short | Barings Global vs. Quantitative Longshort Equity | Barings Global vs. Siit Ultra Short |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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